Phoenix-based Banner Health Network succeeded in Medicare's Pioneer Accountable Care Organizations program. But in an interview with Modern Healthcare Editor Merrill Goozner, Banner Health CEO Peter Fine questions whether the program will be successful in the long run. The leader of one of the nation's larger integrated delivery systems—Banner has 23 hospitals across seven Western states with 36,000 employees—also shares some controversial views on narrow networks, the growing competition between provider networks and his approach to lowering costs.
Modern Healthcare: What allowed your organization, unlike some others in the Pioneer ACO program, to succeed financially in year one?
Peter Fine: It was the recognition at the beginning that we had to focus our activities on the highest users—the highest 5%. We said cost savings are going to come from the most expensive people who are using the most services.
One year doesn't make a successful outcome. This is clearly an experiment. Some people dropped out and I expect more will. Long term, I don't think (the Pioneer) program will be successful (because) it is not an assignment model. I think everyone in this program would prefer people be in the Medicare Advantage plan. The only way you can reduce the level of care is to have a close relationship between the organization and the individual.